Once a hub of the Minneapolis art scene, the Soap Factory is closing its doors permanently.

Its board of directors said Tuesday that it came to a unanimous decision after worsening finances resulted in the sale of the company’s flagship space near the downtown Minneapolis riverfront.

“The Soap Factory really did flourish for awhile,” said board chairman Roy Close. “For me it is a positive more than a negative. It is unfortunate that we weren’t able to pull it out of the hole, but we tried and gave it our best shot, and we will remember it fondly.”

Founded by artists in 1988, the Soap was known for championing experimental work as well as its Haunted Basement every Halloween.

A financial crisis arose four years ago, when the nonprofit organization faced a potential $6 million bill for renovations to its 130-year-old building at 514 SE. 2nd St., once home to the National Purity Soap Co.

The Soap decided to pause its programming at the end of 2015. The plan was to reopen in early 2018; that date was pushed back to mid-2019 but it never reopened, beset by a series of financial misfortunes. Attempts to get a mortgage failed. An investor who planned to open a restaurant in the renovated space loaned $1 million to the Soap. But he canceled his plans and asked for the money back. RJM Construction, a Golden Valley firm that was renovating the building, stepped in to assume that debt plus another $1.5 million.

RJM sold the building at a sheriff’s sale in December. The Soap was unable to raise money to buy back the building. Its new owner, Buhl Investors of Edina, offered the Soap rent-free use of the 6,500-square-foot basement for two years, but the organization’s board concluded that it would cost $500 a month to operate. Plus, it had no money to pay staff and was unwilling to be a volunteer-run operation.

“I think the board just got to the point where they felt there was not enough energy left on the board itself, there was not enough prospects for fundraising, we had no staff, and that it was just going to be a very long haul from zero,” Close said.

The Soap will dissolve by the end of the year. It has already donated its historical records to the University of Minnesota Archives. Close said it still owes about $70,000 in loans, plus some credit card debt.